Iran Oil Tanker Hit by Missiles in Red Sea Near Saudi Arabia

Friday, 11th October - 2019

(Bloomberg) - Iran said missiles struck one of its tankers in the Red Sea, the latest in a series of attacks on oil infrastructure in the region that have roiled energy markets.

The Islamic Republic’s tanker company initially said the attacks probably came from Saudi Arabia, but later withdrew the claim. The incident, which caused a spill and a jump of as much as 2.6% in crude prices, comes weeks after a devastating attack on major Saudi oil facilities that Riyadh blamed on Tehran.

Tensions have been rising steadily in the region since U.S. President Donald Trump unilaterally withdrew from an international nuclear deal with Iran and imposed harsh sanctions on the Islamic Republic. Although so far all sides have said they want to avoid war, there’s a growing risk to supplies from the world’s most important oil-producing region.

“The market has been entirely too complacent given that we are one security incident away from a war,” said Helima Croft, chief commodities strategist at RBC Capital Markets.

The Sabiti, a tanker capable of carrying 1 million barrels a of crude, was damaged on Friday near the Saudi port of Jeddah after being hit by suspected missiles, Iranian state media said. The explosions on the tanker occurred between 5:00 and 5:20 a.m. local time damaging two of its main oil tanks, the Islamic Republic News Agency reported.

A spokesman for the National Iranian Tanker Company, initially said in a call with Iran’s Press TV that the missiles probably came from the direction of Saudi Arabia. NITC later withdrew that claim in a statement.

The ship was hit twice within a 30-minute interval from the east of the Red Sea near its crossing route, Foreign Ministry spokesman Abbas Mousavi said on Telegram.

After initially saying the spill from the tanker had been halted and the damage minimized, the Iranian oil ministry’s Shana news service said crude was again flowing into the Red Sea. No one has provided any assistance to the damaged ship, Al-Alam news channel reported citing Nasrollah Sardashti, head of NITC.

The vessel was under way using its engine and heading south at a speed of 9.6 knots as of 8:45 a.m. London time, according to tanker-tracking data compiled by Bloomberg. Its destination was listed as Larak, an Iranian island in the Strait of Hormuz.